Bosses on the block

By Richard Fletcher

12:00AM GMT 18 Jan 2004

The City's retail watchers have a new game to keep them amused: betting on which beleaguered chief executive or chairman will be the next to walk the plank.

After a stream of bad news from the retail sector, the bosses of many of the high street's best-known names are under threat - and some in the City are betting that a number of them will not last until next Christmas.

The year has already claimed its first scalp with Roger Jennings, the chief executive of Austin Reed, the out-of-fashion fashion retailer, departing after yet another miserable trading update.

Richard Handover, the chairman of WH Smith, is the City's favourite for the boot following a ghastly profits warning which is giving institutional shareholders the jitters. However, the company's non-executives are standing firmly by their man (their main argument appears to be that he is a useful lightning conductor for the new chief executive, Kate Swann).

And then J Sainsbury. Following a lacklustre Christmas performance - which saw the gap with its rivals Tesco and Wm Morrison widen - a growing number in the City question whether Sir Peter Davis, the chief executive, will step up to chairman in March as planned.

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Davis was in an upbeat mood on Tuesday night at Sainsbury's Annual City Food Lecture, despite a quip from the speaker for the night, Sir Francis Mackay, the chairman of Compass. Mackay responded to a question on the relationship between margins and unhealthy food with the barbed comment: "We are all trying to maintain our margins, aren't we Peter?"

Davis told me later: "[The turnaround] is taking longer than people would like. But the board view is that we have got to complete the programme - then we can trade the business harder."

A second profits warning in a month has also left John King, the chief executive of Matalan, looking vulnerable. Even if King is not sacked, few in the City expect him to survive an expected takeover of Matalan.

Nick Bubb, the retail analyst at Evolution Beeson Gregory, the stockbroker, questions the whole future of the chain. "This [profits warning] raises doubts about the viability of the trading format," he says.

But King insists that the "model is not broken", attributing the recent poor performance to management mistakes and an increasingly competitive high street. And he insists that the management team should be judged on the performance of the spring/summer range. "We are not pinning our hopes on it - but it is the start of the recovery," he says.

John Coleman, the chief executive of House of Fraser, also faces a difficult year, as takeover speculation continues to swirl around his department store group - although Coleman has been tipped for the chop before and has so far survived.

Meanwhile, it is not just those operating in the quoted sector who are under intense pressure to perform this year.

After what is said to have been an appalling Christmas, Terry Green, the chief executive of Allders, must hope that Minerva - the property company and majority shareholder in the department store chain - is taking a long-term view.

And having tried to buy the business himself, the shelf life of Peter Williams, the flamboyant and well-respected chief executive of the privately owned Selfridges, may not be desperately long.